…for the continued audacity of diversion that The Fed and this administration have become known for. So far this year, 77 banks have been closed and the last report dollar amount in the F.D.I.C. account was $13 Billion at the end of March with numerous bank failures since then. The dollar is weakening because Bernanke and his buddies are pumping trillions into our economy and now the F.D.I.C. wants to loosen rules so that private equity firms can buy banks. Now why would that be? Could it be because F.D.I.C. is broke and we are on the verge of the commercial real estate bubble implosion and many more banks are going to sink when that happens?
Bernanke: U.S. economy on cusp of recovery
JACKSON, Wyo. (AP) — Federal Reserve Chairman Ben Bernanke declared Friday that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression.
Economic activity in both the U.S. and around the world appears to be “leveling out,” and “the prospects for a return to growth in the near term appear good,” Bernanke said in a speech at an annual Fed conference in Jackson Hole, Wyo.
Y’all know what I am thinking about this POS and The Fed, but Karl Denninger has definitely got it going on better than I ever could state.
Webster Definition Of Hubris: Ben Bernanke
That is a lie.
The two largest remaining free-standing investment banks, Morgan Stanley and Goldman Sachs, were stabilized when the Federal Reserve approved, on an emergency basis, their applications to become bank holding companies.
That too is a lie. These firms survived only because you negotiated a back-door transfer of taxpayer money, free of all obligation, through AIG to these companies. Their application to become bank holding companies also came with exemption requests for BHC leverage limits, which you granted, thus leaving the liability for their continued gambling (and boy have they!) on the taxpayer’s back as well.
The failure of Lehman Brothers demonstrated that liquidity provision by the Federal Reserve would not be sufficient to stop the crisis; substantial fiscal resources were necessary. On October 3, on the recommendation of the Administration and with the strong support of the Federal Reserve, the Congress approved the creation of the Troubled Asset Relief Program, or TARP, with a maximum authorization of $700 billion to support the stabilization of the U.S. financial system.
You and Hank Paulson lied about your intentions for that $700 billion dollar appropriation. That this was a knowing lie, in that the intended disbursement changed before it was finally voted up in Congress, is fact, not supposition – it was disclosed by Neal Kashkari during questioning under oath by Congress that The Fed and Treasury had shelved the “bad asset” purchases several days prior to the final vote, but you never informed Congress of your altered intent.
In short, you and Treasury acquired access to that $700 billion under false pretense. In an honest world we would call that theft by conversion, or simple fraud. But we live in a world where regulatory capture and fraud are part and parcel of everyday life in Washington DC.
Make sure to go over and read the whole article, and do the math yourself. Numbers don’t lie, but people do.
Several months ago, we moved away from a large regional bank to a smaller, well-capitalized bank because the large regional bank had accepted TARP money. They asked us why and I told them. Their response was that they were a) forced to take the TARP funds and b) they were forced to take over failing banks in the region by the FDIC which caused their solvency picture to worsen.
It is clear that the rate of bank failures is picking up and will do so further once we have a collapse in commercial real estate and further defaults on securitized credit card debt, as more and more people lose their jobs. The FDIC is running out of “safe havens” to squirrel away bad assets.
Market Ticker does a great job of explaining a good bit of it. This to me is significant:
Again… the FDIC is running out of places to hide the assets… so they have to bring more equity firms into the banking realm… which they have historically resisted. Apparently, J. Christopher Flowers (J.C. Flowers and Company… previously Goldman Sachs… Harvard University), along with allies from the Carlyle Group, has been pushing Treasury and the Fed in this direction for months. This article explains it:
Bernanke speaks and the Dow goes crazy. How more manipulated can things be? How does this make any sense? Job numbers are “worse than expected” and the Dow goes up, consumer spending is “worse than expected” and the Dow goes up, Bernanke speaks and the Down goes crazy. Just how stupid do “THEY” think we are. I would not invest in this fixed horse race for anything in the world, I make my investments into FOOD AND AMMUNITION!
PM… yep, I’m with you… any spare cash I have these days goes to silver, food stores, and ammo.
Can we try Bernanke and Paulson for treason yet?